After the little bout of whipsaw volatility of the past 3 trading sessions, it will be a tall order for even the mighty NFP to move markets much tomorrow (as long as it's not insanely far from the forecast). Thank the trade war for that. Trade headlines took a big bite out of yields on Tuesday morning and subsequent headlines pushed back in the other direction about 24 hours later.
But markets continued to move after that, and it would be very hard to chalk today's movement up to trade. Reason being, stocks and bond yields moved in opposite directions during the morning's most active trading. If trade were the driver, we'd see stronger correlation.
The dark horse market mover isn't easily identified, but the best guess would be a simple move to the sidelines on both sides of the market. This could have something to do with impeachment proceedings, NFP, or simply an active week of conflicting trade war headlines that coincides with impeachment proceedings and NFP!
Either way, bonds tanked early (right at the 8:20am CME Open, which suggests traders were lined up to "get out"). Stocks tanked right at 9:30am (the NYSE open...) which suggests--well... the same thing it suggested for bonds. Fortunately, the stock selling was brisk enough to result in some of the money landing in the safe haven provided by bonds. 10yr yields recovered to end the day only 3bps higher at 1.81%. Fannie 3.0 MBS outperformed--as they tend to do on red days--with prices down only 2 ticks (0.06) at 101-11 (101.34).